The S&P Global Australia Manufacturing PMI rose to 48.2 in July from 47.0 in June, signaling a slower contraction in overall conditions. The improvement was driven by a return to growth in production, marking the strongest output performance since May 2022, though the increase remained marginal. Despite this, new orders continued to decline and employment fell further, highlighting ongoing weakness in demand. Business confidence rose to its highest level in over three years, supported by optimism about future economic conditions and potential trade opportunities. Input costs increased for the first time in three months, largely due to material shortages and shipping delays, but firms absorbed these costs amid strong competition. Factory gate prices fell for a third consecutive month as manufacturers avoided passing on cost pressures to customers.